Debt gobbles teachers’ pensions

Cash in hand: More and more teachers are feeling the pinch and leaving the profession to free up cash for their creditors. (Photo: Madelene Cronjé)

Cash in hand: More and more teachers are feeling the pinch and leaving the profession to free up cash for their creditors. (Photo: Madelene Cronjé)

Almost 100 000 of the country’s 381 394 teachers have signed a petition calling on government to urgently amend the provisions of its pension fund so that they can make large withdrawals to pay off debt while they are still employed.

The document was drawn up in response to the “ever escalating” number of resignations from the teaching profession because of “severe and sustained financial difficulties”.

They resign only to secure lump sum cash payments from their pension funds to pay off debt, said the document. Their debt burden has “severe negative consequences on their health and job performance”.

The petition, which was organised by the National Teachers’ Union (Natu), will be presented early next month to the director general in the presidency, Cassius Lubisi, Minister of Finance Pravin Gordhan and governor of the Reserve Bank Lesetja Kganyago.

Teachers, many of whom have been in the profession for several decades, have quit in large numbers in recent years, with at least 13 575 resigning between April 2015 and March last year. Over the same period, a further 44 158 left for various other reasons.

A beginner teacher with a four-year university qualification earns R228 984 whereas a senior teacher and a master teacher start off with a minimum of R273 885 and R322 893 respectively.

Depending on the size of a school, a principal’s starting salary ranges from R287 862 to R583 932.

The Gauteng education department has recognised the problem and stated in its annual report that it had implemented retirement planning initiatives “to prepare eligible retirees to retire healthy and address mass resignation due to over-indebtedness”.

Teachers interviewed by the Mail & Guardian said a combination of factors, including low salaries and living beyond their means, resulted in many of their colleagues falling into financial difficulties.

Among those who resigned and now face a bleak future is a 53-year-old Mpumalanga woman who had taught for 28 years.

Left with only R150 000 from her hard-earned pension after settling “a mountain of debt”, she has been battling since last year to find a teaching job. She is surviving on the monthly interest of R1 500 from the R150 000 investment.

“I am also receiving about R400 a month in commission from the sale of linen. I would never have resigned if I had not been in debt,” said the woman, who supports her 22-year-old unemployed son.

A 58-year-old former teacher and mother of six children from Richards Bay in KwaZulu-Natal, who has been in the profession for 36 years, said she was forced to resign in June last year and cash in her pension because of serious financial difficulties.

She used more than R400 000 from her lump sum payout to settle a bond on her house and pay off her car.

Explaining how she got into debt, she said: “My take-home pay was R17 000 but my monthly accounts were about R14 500, excluding petrol, groceries and other living expenses.”

Said the woman who is now battling to find a job: “I even reached a stage where I had to borrow from one mashonisa [loan shark] to pay off another.”

Allen Thompson, Natu’s deputy president, said amending the current provisions of the pension fund would prevent more teachers from leaving the profession.

“This is a move in the right direction as it will encourage people to remain in the profession. Experienced and seasoned teachers, the cream of the crop, were leaving.”

He said teachers from all the unions were signing the petition.

Nkosipendule Ntantala, the president of the National Professional Teachers Organisation of South Africa (Naptosa), said the increasing number of teachers resigning because of financial difficulties was “a serious problem” because it destabilised the teaching profession.

He knew of cases where teachers “trapped in debt” visited autobanks immediately after their salary was deposited into their accounts to make large withdrawals so that stop orders to creditors would not go through.

This situation condemned teachers to “perpetual indebtedness”.

Said Ntantala: “We are in ­partnership with Old Mutual to say that there must be some kind of financial education given to teachers so that they don’t live beyond their means.”

Thompson said teachers were losing hope because a presidential remuneration review commission appointed by President Jacob Zuma in August 2013 had yet to make findings.

The commission was established to investigate remuneration and conditions of service in the public service, specifically focusing on teacher salaries. Its original term was eight months from August 2013 to April 2014 but it has since been extended to April this year.

In October 2015, the chairperson, retired chief justice Sandile Ngcobo, resigned from his post and was replaced by retired deputy president of the Supreme Court of Appeal Justice Kenneth Mthiyane.

Ntantala slammed the commission in a statement, stating it had “failed to produce anything in four years”.

But the commission’s secretary, Phuti Setati, denied this: “Over this period, the commission has submitted regular reports to the president as required by its terms of reference.”

He said it was true that the commission had not yet submitted recommendations for consideration, approval and adoption by the president, but it had until the end of October to do so.

The change of personnel had resulted in the commission not finalising its work sooner.

The commission also took a view that it was “undesirable” to look at teachers’ remuneration and conditions of service separately from the other categories of public servants.

This “explains why there has been no separate report and recommendations pertaining to educators”.

In an emailed response to questions, the Government Employees Pension Fund said there could be cases of teachers, who resigned because of financial difficulties, returning to the profession later.

Asked to provide reasons for teacher resignations, the fund said this information was not provided to the fund, but to the employers.

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